I’m back as promised from yesterday’s post about why now is the time to buy if you’re interested in making a real estate purchase. Today I’ll go over why it’s also necessary to sell your home if you were considering it. If you’re not planning on moving for 3-4 years, then you shouldn’t worry. But if you are like myself and were hoping to move in the next 12-18 months, now is really the time to be making these decisions. My personal home went on the market at the end of the summer, and now that the holidays are coming up and the typical “slower season,” I’m constantly wondering if I should keep the house on the market or pull it off and put it back up for sale come Springtime. The answer is simply to keep the house on the market! After pulling some Metrolist* statistics, the inventory of homes for sale in the Denver Southeast area is down 28.1% and the entire Denver Metro area is down 31.1% overall from the same time last year. Just playing a numbers game, there is no inventory on the market that gives a buyer the option to shop around. The common idea would be that eventually every house would need to rise to the top and sell off. But this will all be changing in the coming months, which I will explain.
It’s being predicted by RealtyTrac that the foreclosure activity will begin to pick up again. Since the red tape that was blocking much of the foreclosed homes is being cleared up by the financial institutions, it’s expected that foreclosures will flood the market in the coming months, adding tons of supply to the market. Remember from economics that it’s not the demand curve, it’s the supply curve that will drive prices down, therefore if your home is already on the market or you plan to put it on in the spring/summer of 2012, now is the time to do it.
Zillow is already estimating that prices will drop 3.2% over the next few months while Standard and Poor is expecting a bigger drop of 5% in home prices over the next few months due to a flooded market. So whichever way it’s viewed, it’s not beneficial to sellers to wait & list their home. There is no comfort in waiting, and you should sell your house now if you’ve been thinking about it.
Now from yesterday’s post I mentioned that buyers shouldn’t be worried about the home price decreasing, they should be worried about the housing cost increasing, (which it is, i.e. rent). Yet sellers should be worried about the continual drop in sales price. So in the coming years (yes I said years!) until the housing inventory starts to clear up, the government will not feel the pressure to keep interest rates low and they will again rise back up to industry norms. This is why now is the perfect time to buy a home before the cost rises, and also the best time to sell – before you lose even more money off of your asking price.
Although the information isn’t always positive, it’s important to know your local neighborhood, and much of what was said here can be applied to any neighborhood in the Denver Metro Area. If you have any questions or comments, please email me and ask – I’d love to hear from you, because Kelly Rose Knows. And for good measure… Check Out This Adorable House!
*Based on information from Metrolist®, Inc. for the period 10/30/10-10/30/11.”